Denmark drops RI as candidate for aid

Denmark drops RI as candidate for aid

JAKARTA (JP): Denmark has dropped Indonesia as a candidate to
become one of the country's main aid recipients due to the shaky
political climate, officials said on Wednesday.

Cooperation Minister Anita Bay Bundegaard told legislators at
a meeting on Tuesday that Indonesia's failure to decentralize its
institutions and the strength of separatist movements would make
Danish involvement "highly risky," the officials said as reported
by AFP in Copenhagen on Thursday.

However, observers in Jakarta criticized the decision and
expressed their surprise over the reasons given by the Danish
government.

Denmark has listed 18 "cooperation partners" from among the
poorest developing nations in the world to receive its
development assistance, the news agency reported.

India and Nigeria were taken off the list late last year and
Indonesia, along with Ethiopia and Cambodia, were candidates to
replace them.

Bundegaard's decision not to bring Indonesia onto the list
drew criticism from the federation of Danish industry.

"We deplore this decision ... because we think that Indonesia
is an appropriate candidate for receiving Danish aid," said
federation official Peter Bo Andersen.

"There are 100 million people in Indonesia living on less than
two U.S dollars per day, which corresponds to the level of
poverty required by Denmark to provide aid," he said.

Denmark is a member of the Consultative Group on Indonesia
(CGI), a group of major donors to Indonesia, which last year
pledged US$4.7 billion in loans.

Hadi Soesastro, an economist at the Center for Strategic and
International Studies (CSIS), called Denmark's move "bad
diplomacy".

"It is a strange decision that doesn't make sense," he told
The Jakarta Post.

"I can understand if the private sector cancels investments
here because of political uncertainties, but I don't expect that
from a government aid institution," he went on.

He said that if Danish officials were worried about security
conditions, they could postpone several aid projects but not stop
aid altogether to Indonesia.

However, Hadi was confident that other countries are unlikely
to follow Denmark's decision.

"Denmark's move is a single, isolated case. We shouldn't be
worried too much about it," he added.

Separately, chief economist at the United Nations support
facility for Indonesian recovery Satish Mishra dismissed
Denmark's move as having a minor impact on Indonesia.

"I would start worrying if Japan, the United States, or
Australia decided to cut their aid to Indonesia," he said.

Mishra said these countries, which were of geopolitical
importance to Indonesia, showed no sign of intending to reduce
their aid commitment.

"Actually, the U.S. might raise its support to Indonesia," he
said, adding that such a move was likely given the policy under
the new U.S. government.

Mishra added that a country's foreign aid target depended
largely on its foreign policy.

According to him, Scandinavian countries like Denmark, Finland
or Norway had only minor historical bindings to Indonesia.

These countries, he said, had their aid priorities closer at
home.

"They are large donors to East European countries, in
particular to Russia," he said.

But Mishra questioned the reasons stated by the Danish
government to scrap Indonesia as a candidate for additional aid.

He said that political uncertainties should not have prompted
donor countries to cancel their aid programs.

"Otherwise, some countries in Africa are not entitled to
receive any aid at all, because some of them don't even have a
government," he said.

Mishra said that most donor countries reduce their aid only
because the necessary funding has been cut from the state budget.

He speculated that Denmark might have changed its aid
priorities or were having a budget cut.

"I can't tell, that is an internal matter for Denmark," he
said. (bkm)